Manufacturers: Growth in emerging markets and a greater reliance on services

[Marketwire] TBR proudly announces the publication of its 4Q08 Network Business Quarterly (NBQ) Benchmark report. For providers of telecommunications network equipment, services and software, the report provides an analysis of the competitive field, market trends and industry issues, comparing key players' performances on critical metrics such as revenue, cost, profit, R&D, headcount and operator capex trends.

According to the report, Ericsson led all vendors with $8.6 billion in telco revenue in 4Q08. ZTE led in revenue growth, with a figure of 23.1%, while Cisco's 19.5% estimated operating margin was highest among benchmark companies. Commenting on the 4Q08 results, TBR NBQ Director John Byrne said, "Ericsson outperformed the market by maintaining strong relationships with legacy customers while expanding into new regions and new product segments. Meanwhile, Huawei and ZTE leveraged emerging market growth and increased penetration in mature segments to post industry-leading revenue growth."

Pricing pressures have caused cutbacks to protect margins, and in 2H08, 30,000+ workers, managers and consultants were cut from vendor payrolls, with cuts primarily focused on R&D staff. Suppliers turned to partnerships and co-sourcing to mitigate the impact of R&D reductions in 4Q08. Shared development with customers is increasing, and shrinking R&D spending and cost-control measures are leading vendors into strategic alliances to expand portfolios.

Looking forward, TBR believes China's award of 3G licenses in January offers significant growth opportunities to many vendors. However, competition will be fierce, as domestic vendors Huawei and ZTE are holding or increasing market share in Chinese 3G contracts awarded thus far.

The NBQ benchmark provides a quarterly analysis of leaders and laggards among telecommunications equipment and services suppliers. These quarterly reports provide key findings & trends, market overview, drivers and changes in revenue, revenue growth and operating margins. The report also includes a quarterly drilldown of the leaders in four major industry sectors: equipment, services, applications and terminals, as well as leaders by geography. The NBQ vendor benchmark report provides an industry overview into financial strategies; resource management including headcount and R&D trends; and go-to-market & product marketing strategies.

Telco Vendors See Growth in Emerging Markets and a Greater Reliance on Services in TBR's 4Q08 Network Business Quarterly Benchmark Report